Have a loan secured by land only. Portion of proceeds loaned were to purchase a mobile home and locate on the land securing the loan. We do not loan on mobile homes but we do loan for mobile homes. That being the case, we will not take a lien interest in the home so insurance will be up to owner- not a requirement. Will the insurance premiums have to be escrowed for along with the property taxes?
Part 2. If an escrow account is now established after settlement but before any payments due from escrow account- should we just go forward from the date the account is established with the original cushion and deal with the shortage & deficiency at annual statement/analysis time or go ahead and have the borrower deposit enough to cover what would have been in the account had the bank began the account at the correct time period?
I’m going to assume that you are also talking about a Higher Priced Mortgage Loan (HPML) aka Section 35. HPMLs that are secured by 1st lien on a principal dwelling are required to have Escrow accounts. In this case you only have the land as collateral, thus you don’t meet the requirements of having to have an Escrow account.
Sinc you don’t have to have an Escrow account, I’m going to guess this is a mute point but I’ll still attempt to address it. If you set up an Escrow account after the loan is opened you will need t do an Escrow Analysis. In doing the Escrow Analysis you’ll determine what money your borrower will need to give you up front to meet the payment obligations. See Section 3500.17(c)(2) of RESPA.
At the time of paying either taxes or insurance, a substantial increase is noted. Is it necessary to reanalyze the loan, so that there is not a substantial increase, in the payment, at the time of the next annual escrow analysis period?